5 more plots recovered | Expiring land leases seen as risk to social turmoil

The five recovered plots are located in this area in Taipa (Google Maps)

The MSAR government recovered five more idle land plots yesterday, bringing the total number to 18. These newly recovered land parcels – located in Avenida de Kwong Tung in Taipa – were intended to be used to build residential buildings covering an area of 18,400 square meters.
Likewise, a sizable number of private land plots slated for construction are facing a chance of being recovered this year, as their leaseholds are about to expire but are ineligible for renewal.
Many land concession contracts to the private sector were granted during the late 1980s and early 1990s, whereas their lease term is generally 25 years. Consequently, the city is anticipated to experience a peak period of land concession expiration in the coming years.
Concerns have risen in society, as construction projects on some of these land plots are more than halfway to completion, while some have even already been capped.
At the latest Legislative Assembly (AL) plenary session held Monday, lawmakers Leonel Alves, Vong Hin Fai and Tong Io Cheng warned that relentlessly recovering these land lots in accordance with the new Land Law “would inevitably cause huge social turmoil.”
“As we all know, most of the transactions for new buildings in Macau are made by pre-sale of uncompleted flats. Moreover, these pre-sales would be made with mortgage loans from banks. If that happens by then, we can imagine that tens of thousands of small proprietors and their families, as well as the banks’ credit business will all suffer a tremendous hit,” indicated Alves.
According to the current Land Law that came into force last March, a leased land plot won’t be issued a “definite concession” until the land is utilized. Furthermore, leaseholds without definite concession cannot be automatically renewed after expiry. Accordingly, the land plot can be recovered by the government.
In order to prove the land’s utilization, the developer needs to not only complete the construction but also obtain its occupation permit. “But they cannot finish the acceptance procedure and be issued the occupation permit in a short time,” said the lawmaker, referring to parcels undergoing construction.
“When submitting the draft bill, the administration should have expected that these situations were imminent, therefore [it] should’ve suggested handling it with an appropriate transitional norm,” he said.
The lawmaker further argued, “the authorities had slowed down and even shelved the urban planning and project approving over recent years,” which is partially the reason why many property projects are at a standstill.
“When the leaseholder is not accountable for the construction delay, it will cause serious injustice and affect the social stability if those land plots [are] recovered for the reason of lease expiry.”
“The problem is that neither the new law nor the previous one stipulated treatment for [construction delay] situations that the leaseholders are not responsible for. Thus we can see such situations as a legal loophole,” he stressed.
The three lawmakers jointly made an oral inquiry at the AL, urging the government to decisively enact a transitional remedy to resolve the dilemma, and then conduct a review on the Land Law.
According to the Official Gazette, the five plots recovered yesterday were held by five different companies, while four of them have their head office located on the Hotel Lisboa’s second floor.

Owners and plots area

Sociedade Fomento Predial Predific, Limitada  7,731 m2
Sociedade Fomento Predial Socipré, Limitada  3,177 m2
Companhia de Investimento Predial Hamilton, Limitada  2,795 m2
Companhia de Investimento Predial Pak Lok Mun, Limitada  2,209 m2
Companhia de Investimento Predial Hoi Sun, Limitada  2,510 m2